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Prime Mover Magazine

NatRoad examines views of Productivity Commission

80 per cent of Australia’s population growth by 2050 will take place in capital cities according to projections recently made by the Productivity Commission.

The Commission further suggests road reform and failures of infrastructure will remain two of the major issues for building better cities going forward. 

The single largest infrastructure spending item for governments in Australia, roads continue to be the most widely used form of transport in urban areas according to the National Road Transport Association (NatRoad).

“Governance arrangements over road investment significantly lags other transport modes, with minimal links between charges and the services users receive, the quality and availability of services and road user preferences, and the costs and funding of service provision and prices,” reported the Productivity Commission.

According to the Commission, key features of a better system for road funding and delivery include:

• investment decisions on roads being informed by users’ preferences
• replacement of the current array of indirect fees and charges on motorists with explicit prices, which will make transparent the costs of providing road services and allow the development of sensible alternatives for meeting service goals
• users’ choices between transport modes, and the use of roads, being guided more by prices that help to allocate finite capacity, resulting in more efficient use of the transport network
• public confidence in the price-setting process through independent vetting of proposed expenditure and the quality of service actually provided — so that prices only reflect the efficiently-incurred costs of services that are valued by users.

Another recommendation of the Inquiry made by the Productivity Commission was to implement a market solution to road user charging for all heavy and light vehicles, with pricing linked to the level of road infrastructure investment required, and community service obligation payments made available for maintenance of low volume roads which are key components of regional and rural transport networks.
In a statement made today NatRoad agreed that road reform should assist cities plan for the future. It said any pricing mechanism must take into account that building roads is in part a community service obligation of Government and that pricing signals should not completely guide decisions about road construction.

“It is likely that the Commission will be able to get its teeth into this issue in the near future. It was a recommendation of the recent Inquiry into National Freight and Supply Chain Priorities that Government brings forward the proposed 2019 Productivity Commission review of rail and road operating frameworks to 2018,” said NatRoad in an issued statement.

“This review should include a focus on productivity, harmonisation of standards, safety and regulation.”

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